Palantir Technologies Co., Ltd. (PLTR – (Free Report) recently appeared on the list of most searched stocks on Zacks.com. Therefore, you may need to consider some important factors that may influence the stock's performance in the near future.
Over the past month, the company's stock has returned +46.5%, compared to a +4.8% change in the Zacks S&P 500 Composite Index. During this period, the Zacks Technology Services industry, which includes Palantir Technologies Inc., rose 20.4%. The key question here is: What is the future direction of the stock price?
While media releases and rumors about significant changes in a company's business prospects typically cause its stock to “trend” and lead to immediate price movements, there are some fundamentals that ultimately govern buy-and-hold decisions. There are always facts.
Regarding revisions to performance forecasts
Zacks prioritizes evaluating changes in a company's future earnings expectations above all else. That's because we believe that the present value of future income streams determines the fair value of a stock.
Essentially, we study how the sell-side analysts covering a stock are revising their earnings estimates to reflect the impact of the latest business trends. And as a company's earnings expectations rise, so will the fair value of its stock. If the fair value is higher than the current market price, investors will be more willing to buy the stock, causing the price to rise. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
For the current quarter, Palantir Technologies Inc. is expected to post earnings of $0.08 per share, which would represent a change of +60% from the year-ago quarter. The Zacks Consensus Estimate has changed +16.1% over the past 30 days.
Consensus earnings estimate of $0.33 for the current year represents a +32% change from the prior year. Over the past 30 days, this estimate has changed by +9%.
Next year's consensus earnings estimate of $0.40 represents a +20.5% change from the earnings that Palantir Technologies, Inc. was expected to report a year ago. Over the past month, the forecast has changed by +10.7%.
The Zacks Rank, a proprietary stock evaluation tool with an impressive, outside-audited track record of impressive results, harnesses the power of earnings estimate revisions to be a more conclusive indicator of a stock's short-term price performance. . The magnitude of the recent consensus estimate change, along with three other factors related to earnings expectations, has given Palantir Technologies a Zacks Rank of #3 (Hold).
The chart below shows the company's consensus EPS estimate over the next 12 months over time.
12 months EPS
Revenue growth forecast
There's no question that a company's profit growth is the best indicator of its financial health, but nothing will happen if it doesn't make a profit. It's nearly impossible for a company to expand its bottom line without growing it over the long term. Therefore, it's important to know a company's earnings growth potential.
Palantir Technologies Inc.'s consensus revenue estimate for the current quarter is $614.88 million, representing a year-over-year change of +17.1%. For the current and next fiscal years, estimates of $2.68 billion and $3.25 billion represent changes of +20.6% and +21.3%, respectively.
Last reported results and surprising details
Palantir Technologies Inc. reported revenue of $608.35 million in its last reported quarter. This represents a year-over-year change of +19.6%. EPS for the same period was $0.08, compared to $0.04 a year ago.
The reported earnings are a surprise of +0.81% when compared to the Zacks Consensus Estimate of $603.48 million. EPS surprise was 0%.
Palantir Technologies Inc. has surpassed consensus EPS estimates two times over the last four quarters. The company has surpassed consensus revenue estimates three times during this period.
evaluation
You cannot make efficient investment decisions without considering stock valuation. To predict a stock's future price performance, it is important to determine whether the current price accurately reflects the intrinsic value of the underlying business and the company's growth prospects.
The present value of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), and the past value of your company Comparing a company to its peers based on these parameters can help you see if it is overvalued, overvalued or undervalued, but how reasonable its stock is You can get a good idea of what
The Zacks Value Style Score (part of the Zacks Style Scores system) pays close attention to both traditional and non-traditional valuation metrics and rates stocks from A to F, where A is better than B. , B is better than C, A is better than B, and B is better than C). ), can be very helpful in identifying whether a stock is overvalued, properly valued, or temporarily undervalued.
Palantir Technologies Inc. is rated D on this score, indicating that it trades at a premium compared to its industry peers. Click here to see the values of some of the metrics that determined this grade.
conclusion
The facts discussed here, and much of the other information on Zacks.com, may help you decide whether the market buzz about Palantir Technologies Inc. is worth paying attention to. However, his Zacks Rank #3 for the company suggests the company is likely to perform in line with the broader market. in a few days.
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The company is a little-known chemical company, and despite a 65% increase over last year, it's still very cheap. With continued demand, soaring 2022 profit estimates and $1.5 billion in stock buybacks, retail investors could jump in at any time.
Does this company stack up against other stocks that have recently seen their Zacks stock double, like Boston Beer Company, which has soared +143.0% in less than 9 months, and NVIDIA, which has soared +175.9% in one year? , or may exceed.
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